Question 1: Consider an option on dividend-paying stock when stock price $30‚ the exercise price is $29‚ the risk-free interest rate is 5% p.a.‚ the volatility is 25%p.a. and time to maturity is 4 months. Assume that the stock is due to go ex-dividend in 1.5 months. The expected dividend is 50cents. a. b. c. what is the price of the option if it is a European call? What is the price of the option if it is a European put? Use the results in the Appendix to this chapter to determine whether there
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A Wrinkle in Time written by Madeline L’Engle is about a girl named Meg Murry‚ her little brother Charles Wallace‚ and their friend Calvin O’Keefe who are normal kids and then they go out on a journey to go find Meg’s lost father. One main character in A Wrinkle in Time is Meg Murry. Meg Murry is a young and plain girl. She wears glasses and has braces. She thinks she is unattractive and doesn’t think good things about herself. In school she gets into trouble with her other classmates because she
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Chapter 1 to 3 Chapter 9 Revision on Financial Derivatives & Properties of Options Prices • What are financial derivatives? What are their roles in finance? • Give examples of derivatives and draw their profit diagrams. • Name some financial derivatives that are traded in Bursa Malaysia. 2 • Definition A financial instrument that has a value determined by the price of something else Risk management. Derivatives are tools for companies and other users to reduce risks Speculation
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A put on Sanders stock with a strike price of $35 is priced at $2 per share‚ while a call with a strike price of $35 is priced at $3.50. The maximum per-share loss to the writer of an uncovered put is __________‚ and the maximum per-share gain to the writer of an uncovered call is _________. A. $33; $3.50 B. $33; $31.50 C. $35; $3.50 D. $35; $35 You are cautiously bullish on the common stock of the Wildwood Corporation over the next several months. The current price of the stock is $50 per share
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cannot reach an agreement on an issue requiring a board vote‚ an independent arbitrator will be used to resolve the conflict. • Embedded in its equity interest‚ Berry has an option to put its investment in Cherry common stock back to Cherry for the greater of $20 million or appraised value after two years. The option expires after year five. • In the event that either joint venture member chooses to sell a portion‚ or all‚ of its ownership interest‚ the other member has the right of first
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Chapter 15 Quiz 15.1) A portfolio is currently worth $10 million and has a beta of 1.0. An index is currently standing at 800. Explain how a put option with a strike price of 700 can be used to provide portfolio insurance. Index goes down to 700 10*(800/700)= 8.75 million Buying put options= 10‚000‚000/800= 12‚500 If you buy the options at 800‚ the value will be 12‚500 times the index with a strike price of 700 therefore providing protection against a drop in the value of the portfolio below
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EBay Bids for Structured Change. Case Study Answers EBay started out with a U form‚ or functional‚ design. What changes in that design have already occurred as a result of the company’s growth? What kind of changes seem likely for the future? • One of the first things we need to look at is what the u-form design is. The U-form organization (U stands for unity)‚ also called functional design‚ relies almost exclusively on the functional approach to departmentalization . The U-form design is used
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K)‚ where S is the price of a stock and K is a fixed strike price. You always get something with a happy call. Let P be the price of the stock at time t 0 and let C‚ and C2 be the prices of ordinary calIs with strike prices K and 2K‚ respectively. The fair price of the happy call is of the fonn = CH Find the constants ex‚ fJ‚ and y. y ~~: = exP + fJC. + yC2. C ’..L. iLv"‚( ••• IL •.... .... (fIJ ‚..~’c..•• You are interested in stock that will either gain 30% this
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A report on Ebay and Taobao. Ebay v/s Taobao Critically evaluate eBay’s chosen market entry strategies‚ into the Chinese ‘C2C’ market‚ determining the shortcomings of the strategies deployed during the case study period. When entering into a new market‚ there are many aspects that must be considered in order for a company to be successful. Through this case study we will look at how eBay developed their market strategy using the concept of six key factors timing‚ location‚ marketing
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At the beginning of the novel‚ Meg was self-deprecating and somewhat insecure. She was in her attic bedroom‚ pondering on how “It’s the weather on top of everything else. On top of me. On top of Meg Murry doing everything wrong” (Page 7). This quote shows how little she thinks of herself; how she thinks she does “Everything Wrong”. This also shows what little confidence she has‚ again through her doing “Everything Wrong”. In the middle of the novel‚ she accepted her differences‚ but didn’t fully
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